Thailand's Bangchak to grow palm, help in biodiesel blending goals

11 February 2011 07:33  [Source: ICIS news]

SINGAPORE (ICIS)--An agreement between Thailand’s Bank for Agriculture and Agricultural Cooperatives (BAAC) and Bangchak Petroleum to plant palm trees for biodiesel will help meet country's blending goals, traders said on Friday.

The BAAC signed the agreement on 20 January to lease 192 hectares (474 acres) of degraded tangerine orchards in the Nakhon Nayok province to Bangchak Petroleum to grow palm trees for its biodiesel production facility at Ayutthaya.

The site will include a palm oil learning centre, a research unit and cultivation site where experts will use advanced technology for high productivity yields.

“This project would help to ease the palm oil shortages in the country and help Thailand to enlarge its inventory of palm oil,” an Indonesian palm oil producer said.

Thailand has an active B3 biodiesel mandate where 3% of biodiesel is required to be blended with fossil fuel and the country is looking to implement a B5 mandate in the second half of the year.

Market players said they believed that this project would complement the government’s initiatives to launch the B5 mandate that would require 5% of biodiesel to be mixed with fossil fuel.

Thailand is facing a shortage of palm oil for biodiesel as demand increased 5.1% from last year, while supply was expected to stagnate because of drought, a local media report said.

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By: Serena Seng

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